Close to 20 years ago in the pages of Agency Sales magazine a MANA member recalled the primary reasons why she and her business partner decided to follow an independent manufacturers’ representative career path. Among the several reasons for following this path, she cited these:

• A desire to define her own destiny.
• A belief that she had the skills necessary to be successful.
• An inclination to test her beliefs that she could do things better than the management at companies where she had worked previously.
• To fulfill a desire to stop the cycle of corporate-dictated relocations around the country every couple of years.

Conversations with several individuals who have opened — or are about to open — their agency doors indicate the aforementioned remain as primary reasons cited for opening an agency. Those same individuals report that signing contracts with reputable principals, building solid relationships with customers in their territory and joining MANA are key considerations as they move ahead with business plans.

Perhaps a typical career path toward becoming a successful independent manufacturers’ representative is that described by Grant Melocik, Grant Melocik Sales, Fresno, California.

Following a Plan

According to Melocik, “I worked in various engineering and management capacities for a large corporation in the Midwest for the first 20 years of my working life. Upon divestiture of the division that I worked in I was recruited by a California company. When that company had financial troubles in the 2001 time frame, I decided it was time to go off on my own as I had always wanted to do.”

He continues that to accomplish that goal, “I purchased a small product line. While producing that product I was approached by some great people from South Korea whom I had worked with 20 years earlier when at the larger company. The Koreans had started their own company and needed someone to represent them in the United States. That’s how things started. The rep business ended up being much better than the product business, so I sold the product business to my partner and have been doing the rep business ever since. Since I did a large amount of overseas work for the large corporation I first worked for, I was very comfortable representing companies in Asia, which is what I still do.”

From his first days as an agent Melocik indicates, “My key priority was establishing a product that met customer needs better than my competition, and therefore ensuring success and an income stream. Since my training and background is in engineering I was very product-oriented, hence this focus. I used a lot of the engineering knowledge that I had from my previous positions to work with my principal to develop a product that met the market needs much better than what was commonly being used at that time.

Establishing Market Position

“It took two years for things to start rolling, but when they did we were able to rapidly take dominant market positions in the areas where we competed because we had analyzed the unique requirements for the industries we serve and met them better. I was fortunate that the people I worked with at my principal were individuals that I had established a relationship with 20 years earlier. They listened to me and we were able to work together effectively to accomplish this goal. I think it ended up being a good combination. They had the advanced technical and manufacturing skills and I was able to provide both the local market information as well as some of the fundamental technical lessons I had learned when employed in the large company. We were also careful to target markets where we would not get squashed by the big guys — a very important decision.”

When it came to getting lines, Melocik explains, “The first line actually found me. Later I wanted to make sure I did not have all my eggs in one basket and I monitored the advertisements in Agency Sales magazine. I approached a few principals but then got very interested in one advertisement from an existing rep looking to add sub-reps to his existing business. That’s how I picked up two additional lines for my business and that has worked out very well, since I’m part of a loose coalition of several reps. We are able to cover for each other when we want to take some time off since we are each basically one-person rep companies.”

Melocik continues that along the way to becoming a rep, “I really never encountered any surprises. I had taken an entrepreneurial course at a local university that helped, although my business plan was pretty much out the window before the first year was up. The business plan did provide a roadmap though and helped me make sure that I took care of all the hygiene factors such as business registrations, estimated taxes, and so forth.”

When asked if he might have done anything differently if he could rewrite his agency’s early history, Melocik says, “Thinking about an answer to this question has been enlightening. With perfect 20/20 hindsight there are a number of key accounts early on that I would have certainly approached differently. As a technical person I’ve always been strong in that area; however, I have missed a few key accounts because I was outsold by competition who emphasized a better approach to the decision-making sales path than I did. For most of the companies that I work with, the engineers carry a great deal of clout. However, that’s not always the case, and I learned the hard way that sometimes the engineers who claim they are the key people are not, in fact, the key people — technical or otherwise. Now those accounts are very tough to break into with competition well established. Having said that, it’s tough to learn this kind of information until it’s too late.”

Comparing Notes

By way of comparing their experiences during the agency start-up process, several other MANA members described what they went through on the way to becoming an independent manufacturers’ representative:

• While Jeff Clack, Jeff Clack & Associates, Valparaiso, Florida, maintains he’s glad he settled on being an independent manufacturers’ representative, he says, “I can honestly say I should have done this sooner. I think if I had done that I could have grown the business faster and although I’m only 52, lined up people as possible successors for me in the business.”

While succession planning is important for Clack, who opened his own agency doors in 2011, getting the right lines for his agency is also important. “Not only was I concerned about getting lines,” he says, “I wanted to make sure that I had quality, well-respected products that would meet my customers’ needs. Thankfully, I had developed a good reputation where I previously worked with my father. I relied on business relationships and established friendships to get lines.”

Clack also points to MANA and Agency Sales when it comes to getting lines and learning about best practices.

Too Many Eggs in One Basket

As the head of a fairly new agency, Clack maintains that he remains wary of the dangers of putting all his eggs in one basket when it comes to working with principals. “My meat and potatoes remain in the agricultural business. The question that you always keep in mind is whether my principals are going to continue going to market via independent representation or opt for direct company salespeople. Then you’re concerned with the prospect of losing a principal. What’s the plan if you lose one or two principals this month? What will you do? Where will you go? On top of that you’ve always got to be concerned with your compensation and be sure you’ve got protection with post-termination compensation.”

When asked whether he could recall encountering any surprises on the way to opening his agency doors, the only thing he could point to was the extent of various state and federal governmental hoops he had to jump through. “The barrage of complex laws that have to be adhered to is unbelievable. It seems as if the paperwork will never end. It’s almost as if they’re trying to create deterrents in front of small businesses.”

• As he anticipated opening his own agency Rick Rudolph looked back to the time 20 years ago when he was previously a rep. Since that time he’s served in sales and executive positions with manufacturers working with both independent representatives and distributors. “I looked back over my career and considered the good and bad attributes of the reps I was familiar with. I looked to include the very best attributes with what I do as an independent representative.”

Signing Lines

Just as so many others who are opening their agency doors, Rudolph, Rick Rudolph Associates, LLC, Melrose, Massachusetts, was faced with the prospect of signing lines for his fledgling organization. He explains that he began with “zero” lines but his reputation and relationships with others in the business allowed him to get off the ground. “Thankfully I had established a professional reputation over the years and I’ve had a number of people — either people I sold to or those I worked with — go to bat for me when it came to referring lines.”

In addition to getting lines, he explains that another concern that has occupied much of his time was the generational change that has occurred when it comes to selling. “I knew going in that it was going to be much different today than it was two decades ago when I was a rep. Today you’re dealing with the ‘millennial’ generation, and it’s much more difficult to make contact with them. So many of those who make the buying decisions don’t necessarily want to see you. Instead they’ll ask you to just drop off a line card or e-mail them some information. To combat that I simply keep calling them. I send them literature, keep hammering on them and remain diligent in my approach.

“Eventually, since I always seem to be there, they figure that I’m a trusted source and they’ll provide me with information or the name of the contact I need to see. It’s all about staying on the job and remaining diligent.”

MANA Contributes to Success

He also cites MANA as a contributing source of his initial success. “There are as many good and bad manufacturers as there are good and bad reps,” he says. “I look to a manufacturing company’s membership in MANA as a sign that they’re serious about going to market with reps and that they subscribe to a code of ethics.” He adds that MANA has been a great source of best practices to guide him in the early days of his agency.

While his agency doors have been open less than a year, Rudolph notes that in the early going he really hasn’t encountered any surprises in what he’s tried to get done. “I understand how business is conducted. Like so many other reps, I’ve been terminated simply because I sold too much and I’ve had to encounter the prospect of house accounts. That all comes with the territory. To counter problems like that, I remember how I’ve always approached business: ‘Whatever you’re going to do, do it to the best of your ability.’”

Shying Away From Corporate Sales

Larry Tindell has been in sales his whole life but admits he’s migrated away from corporate sales “Because it’s just not fun anymore. What’s happened is that there’s too much pressure from above to deliver the numbers. If corporate managers don’t actually come out and tell you how important the numbers are that message is certainly implied.” That’s why he’s now opening his own agency — Tyne Valley, Inc., Itasca, Illinois — and is faced with the prospect of getting lines.

“I’m still in the investigative stage right now as I seek to determine those lines that I want to establish lasting relationships with. It’s in this area that MANA has been a huge help. I look to MANA as it’s the association for true professionals and the organization has provided me with any number of good contacts. I’ve also had conversations with Jerry Leth, MANA’s vice president & general manager, and he’s been a great help.”

Rick Kemp, KC Solutions, Middletown, Delaware, explains, “I’ve been in sales with other companies for years. I’ve gained a ton of experience and made a wealth of contacts. I finally figured if I’m going to work so hard making money for others, why not do it for myself? Now was the time to make a change, take a gamble and go into business for myself.”

He continues that like his rep peers his biggest issue is aligning himself with proper principals. “We can get inundated with manufacturers looking to sell through our company but we’re looking for the right fit. Our goal is to stay away from commoditized products and find lines that fit our market niche.”

Kemp notes that MANA has been a great help in terms of providing information and research material. “We’ve been very pleased with the assistance we’ve been provided.”

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